As economist Lawrence Mishel, president of EPI, told me, "In the midst of the worst jobs crisis in over 70 years, passing a $15 billion bill — comprising mostly of a tax credit of questionable efficacy — is like trying to extinguish a 10-alarm fire with a leaky garden hose."

In contrast, bold plans that match the scale of the crisis aren’t getting enough attention. For example, EPI calls for: a one-year extension of unemployment compensation and COBRA health benefits; fiscal relief for states that will otherwise lay off more teachers, firefighters, police officers and other workers; a New Deal-like public service employment program; investments in transportation and school modernization; and a carefully crafted job-creation tax credit. It would cost $400 billion in the first year to create 4.6 million jobs, and the entire cost could be recouped within 10 years by enacting a financial transactions tax. Also, in a recent cover story in The Nation, economist Robert Pollin laid out an ambitious yet realistic plan to create 18 million jobs over the next three years through leveraging private-public partnerships.

But don’t expect any of this to have an easy time in Congress, where the deficit hysteria now sweeping the political and pundit class constrains the possibility for bold public policy.

A recent New York Times headline screams, "Huge Deficits May Alter U.S. Politics and Global Power."The Wall Street Journal offers this grim warning: "Deficit Balloons into National-Security Threat." The Washington Post describes "a budget hole that is driving accumulated debt to dangerous levels." Behind these sorts of warnings are many of the people who were so fixated on deficits that they missed the housing and credit bubble — not to mention the Wall Street chicanery that made them possible. Now they are peddling the idea that we risk a major debt crisis if government spending continues to fill the gap left by the decline of private-sector demand and investment.

The deficit hawks are unable to distinguish bad deficits from good ones. Bad deficits result from collapsing revenue — whether due to wasteful tax cuts or sluggish economic activity — or unnecessary wars of occupation and other wasteful military spending. Good ones stem from spending to create jobs and spur growth through investments in infrastructure, science and technology, new energy sources, education and worker training.

Instead of giving into the deficit hype with discretionary domestic spending freezes and bipartisan deficit-reduction commissions, President Obama would be wise to directly challenge the conservative narrative that a responsible government cannot drive economic activity.

The president could explain that by virtue of the dollar’s role as the world’s principal reserve currency, America can accumulate more debt than other economies. Without dollar-denominated debt, the world economy would come to a screeching halt. And that the reality isn’t likely to change in the short- or medium-term, given the problems with the euro and the yen and China’s resistance to financial liberalization.

And Obama could argue that, as our experience after World War II amply demonstrates, by investing in a productive economy we can comfortably reduce our debt while expanding the shared prosperity of the American people.

The Democrats should give Americans a clear choice. Push for a bold jobs bill — let Republicans stand up and filibuster it, just as Democrats forced Kentucky Sen. Jim Bunning (R) to do in his indefensible effort to block an extension of unemployment benefits. Then, come November, take a pro-jobs record to the American people, having exposed the GOP for the obstructionist party that it is.